Loans Held for Investment and Allowance for Credit Losses | Note 3 – Loans Held-for-Investment In conjunction with the adoption of ASC 326, the Company expanded its four loan portfolios into ten portfolio segments. For the periods ended June 30, 2021 and December 31, 2020, the following tables outline the Company’s loan portfolio by the ten portfolio segments where applicable. For disclosures related to the period ended June 30, 2020, management has elected to maintain its previously disclosed loan segments. Loans held-for-investment June 30, December 31, 2021 2020 2020 Commercial: C&I* $ 983,103 $ N/A $ 1,131,382 Municipal 179,356 N/A 181,325 Total Commercial 1,162,459 1,509,454 1,312,707 Agricultural 95,212 97,448 94,864 Real Estate: Construction & Development 550,928 N/A 553,959 Farm 185,288 N/A 152,237 Non-Owner 673,608 N/A 617,686 Owner Occupied CRE 820,055 N/A 746,974 Residential 1,328,474 N/A 1,248,409 Total Real Estate 3,558,353 3,235,208 3,319,265 Consumer: Auto 383,764 N/A 353,595 Non-Auto 104,814 N/A 90,602 Total Consumer 488,578 410,957 444,197 Total Loans 5,304,602 5,253,067 5,171,033 Less: Allowance for credit losses (62,138 ) (68,947 ) (66,534 ) Loans, net $ 5,242,464 $ 5,184,120 $ 5,104,499 * All disclosures for the C&I loan segment include PPP loan balances, net of deferred loan fees, as disclosed on the face of the balance sheet on page 4. Outstanding loan balances at June 30, 2021 and 2020, and December 31, 2020, are net of unearned income, including net deferred loan fees. Our subsidiary bank has established a line of credit with the Federal Home Loan Bank of Dallas (“FHLB”) to provide liquidity and meet pledging requirements for those customers eligible to have securities pledged to secure certain uninsured deposits. At June 30, 2021, $3,311,924,000 in loans held by our bank subsidiary were subject to blanket liens as security for this line of credit. At June 30, 2021, there was no balance outstanding under this line of credit. The Company’s non-accrual June 30, December 31, 2021 2020 2020 Non-accrual $ 29,786 $ 39,320 $ 42,619 Loans still accruing and past due 90 days or more — 92 113 Troubled debt restructured loans still accruing* 23 25 24 Total $ 29,809 $ 39,437 $ 42,756 * Troubled debt restructured loans of $7,305,000, $7,275,000 and $7,407,000, whose interest collection, after considering economic and business conditions and collection efforts, is doubtful are included in non-accrual The Company had $30,114,000, $39,724,000 and $42,898,000 in non-accrual, Non-accrual June 30, December 31, 2021 2020 2020 Commercial: C&I $ 3,587 $ N/A $ 5,015 Municipal — N/A — Total Commercial 3,587 4,618 5,015 Agricultural 1,055 1,056 1,076 Real Estate: Construction & Development 1,520 N/A 3,838 Farm 1,791 N/A 7,299 Non-Owner 6,584 N/A 5,243 Owner Occupied CRE 8,976 N/A 10,797 Residential 5,901 N/A 8,851 Total Real Estate 24,772 33,170 36,028 Consumer: Auto 329 N/A 407 Non-Auto 43 N/A 93 Total Consumer 372 476 500 Total $ 29,786 $ 39,320 $ 42,619 No significant additional funds are committed to be advanced in connection with non-accrual Summary information on the allowance for credit losses for the three and six-months Three-months ended June 30, 2021 C&I Municipal Agricultural Construction Farm Beginning balance $ 12,323 $ 2,191 $ 1,985 $ 13,246 $ 1,223 Provision for loan losses (2,327 ) (1,603 ) (667 ) 2,386 (617 ) Recoveries 308 — 15 — 1 Charge-offs (118 ) — (21 ) — — Ending balance $ 10,186 $ 588 $ 1,312 $ 15,632 $ 607 Three-months ended June 30, 2021 (continued) Non-Owner Owner Residential Auto Non-Auto Total Beginning balance $ 9,492 $ 9,878 $ 11,189 $ 1,068 $ 379 $ 62,974 Provision for loan losses 901 517 26 257 88 (1,039 ) Recoveries 39 4 64 103 61 595 Charge-offs — — (45 ) (162 ) (46 ) (392 ) Ending balance $ 10,432 $ 10,399 $ 11,234 $ 1,266 $ 482 $ 62,138 Six-months C&I Municipal Agricultural Construction Farm Beginning balance $ 13,609 $ 1,552 $ 1,255 $ 13,512 $ 1,876 Provision for loan losses (3,566 ) (964 ) 54 2,118 (1,279 ) Recoveries 531 — 24 2 10 Charge-offs (388 ) — (21 ) — — Ending balance $ 10,186 $ 588 $ 1,312 $ 15,632 $ 607 Six-months Non-Owner Owner Residential Auto Non- Total Beginning balance $ 8,391 $ 12,347 $ 12,601 $ 1,020 $ 371 $ 66,534 Provision for loan losses 1,953 (1,950 ) (1,358 ) 398 126 (4,468 ) Recoveries 94 10 83 176 108 1,038 Charge-offs (6 ) (8 ) (92 ) (328 ) (123 ) (966 ) Ending balance $ 10,432 $ 10,399 $ 11,234 $ 1,266 $ 482 $ 62,138 Three-months ended June 30, 2020 Commercial Agricultural Real Estate Consumer Total Beginning balance $ 11,773 $ 2,154 $ 41,256 $ 5,257 $ 60,440 Provision for loan losses 6,820 361 1,469 50 8,700 Recoveries 540 29 59 73 701 Charge-offs (561 ) — (161 ) (172 ) (894 ) Ending balance $ 18,572 $ 2,544 $ 42,623 $ 5,208 $ 68,947 Six-months Commercial Agricultural Real Estate Consumer Total Beginning balance $ 12,122 $ 1,206 $ 33,974 $ 5,197 $ 52,499 Provision for loan losses 7,615 1,310 9,390 235 18,550 Recoveries 690 30 135 164 1,019 Charge-offs (1,855 ) (2 ) (876 ) (388 ) (3,121 ) Ending balance $ 18,572 $ 2,544 $ 42,623 $ 5,208 $ 68,947 Additionally, the Company records a reserve for unfunded commitments in other liabilities which totaled $6,751,000, $809,000 and $5,486,000 at June 30, 2021 and 2020, and December 31, 2020, respectively. The reversal of provision for credit losses of $1,206,000 reported in the consolidated statement of earnings for the three-months ended June 30, 2021 is the aggregate reversal of provision of loan losses of $1,039,000 and the reversal of provision for unfunded commitments of $167,000. The reversal of provision for credit losses of $3,203,000 reported in the consolidated statement of earnings for the six-months The Company’s loans that are individually evaluated for credit losses (both collateral and non-collateral June 30, 2021 Collateral Collateral Non-Collateral Total Loans Related Related Non-Collateral Total Commercial: C&I $ 1,091 $ 2,496 $ 20,838 $ 24,425 $ 723 $ 3,865 $ 4,588 Municipal — — 885 885 — 275 275 Total Commercial 1,091 2,496 21,723 25,310 723 4,140 4,863 Agricultural 328 727 5,195 6,250 171 1,084 1,255 Real Estate: Construction & Development 1,282 238 9,201 10,721 24 1,075 1,099 Farm 1,697 94 2,745 4,536 — 9 9 Non-Owner 6,444 140 33,707 40,291 15 4,185 4,200 Owner Occupied CRE 5,605 3,371 42,832 51,808 544 2,600 3,144 Residential 3,762 2,139 28,110 34,011 191 2,418 2,609 Total Real Estate 18,790 5,982 116,595 141,367 774 10,287 11,061 Consumer: Auto — 329 1,342 1,671 1 4 5 Non-Auto — 43 353 396 — 2 2 Total Consumer — 372 1,695 2,067 1 6 7 Total $ 20,209 $ 9,577 $ 145,208 $ 174,994 $ 1,669 $ 15,517 $ 17,186 December 31, 2020 Collateral Collateral Non-Collateral Total Loans Related Related Non-Collateral Total Commercial: C&I $ 1,544 $ 3,471 $ 25,629 $ 30,644 $ 799 $ 4,592 $ 5,391 Municipal — — 9,439 9,439 — 1,435 1,435 Total Commercial 1,544 3,471 35,068 40,083 799 6,027 6,826 Agricultural 470 606 5,572 6,648 96 886 982 Real Estate: Construction & Development 1,176 2,661 11,368 15,205 35 617 652 Farm 2,614 4,685 3,349 10,648 654 658 1,312 Non-Owner 4,009 1,234 17,383 22,626 500 1,421 1,921 Owner Occupied CRE 7,279 3,518 51,933 62,730 657 5,172 5,829 Residential 4,347 4,504 28,196 37,047 676 2,431 3,107 Total Real Estate 19,425 16,602 112,229 148,256 2,522 10,299 12,821 Consumer: Auto — 407 1,523 1,930 1 5 6 Non-Auto — 94 440 534 1 1 2 Total Consumer — 501 1,963 2,464 2 6 8 Total $ 21,439 $ 21,180 $ 154,832 $ 197,451 $ 3,419 $ 17,218 $ 20,637 The following table presents the recorded investment with respect to impaired loans, the associated allowance by the applicable portfolio segment and the unpaid contractual principal balance of the impaired loans at June 30, 2020, in accordance with the legacy “incurred loss” methodology disclosure requirements (in thousands): June 30, 2020 Unpaid Recorded Recorded Total Related Year-to- Three- Commercial $ 6,013 $ 739 $ 3,879 $ 4,618 $ 1,250 $ 24,270 $ 23,572 Agricultural 1,287 529 527 1,056 83 219 179 Real Estate 45,703 20,370 12,800 33,170 1,711 17,586 17,107 Consumer 585 — 476 476 2 606 552 Total $ 53,588 $ 21,638 $ 17,682 $ 39,320 $ 3,046 $ 42,681 $ 41,410 The Company’s allowance for loans that are individually evaluated for credit losses and collectively evaluated for credit losses as of June 30, 2021 and December 31, 2020, are summarized in the following table by loan segment (in thousands). Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories. June 30, 2021 C&I Municipal Agricultural Construction Farm Loans individually evaluated for credit losses $ 4,588 $ 275 $ 1,255 $ 1,099 $ 9 Loans collectively evaluated for credit losses 5,598 313 57 14,533 598 Total $ 10,186 $ 588 $ 1,312 $ 15,632 $ 607 June 30, 2021 (continued) Non-Owner Owner Residential Auto Non-Auto Total Loans individually evaluated for credit losses $ 4,200 $ 3,144 $ 2,609 $ 5 $ 2 $ 17,186 Loans collectively evaluated for credit losses 6,232 7,255 8,625 1,261 480 44,952 Total $ 10,432 $ 10,399 $ 11,234 $ 1,266 $ 482 $ 62,138 December 31, 2020 C&I Municipal Agricultural Construction Farm Loans individually evaluated for credit losses $ 5,391 $ 1,435 $ 982 $ 652 $ 1,312 Loans collectively evaluated for credit losses 8,218 117 273 12,860 564 Total $ 13,609 $ 1,552 $ 1,255 $ 13,512 $ 1,876 December 31, 2020 (continued) Non-Owner Owner Residential Auto Non-Auto Total Loans individually evaluated for credit losses $ 1,921 $ 5,829 $ 3,107 $ 6 $ 2 $ 20,637 Loans collectively evaluated for credit losses 6,470 6,518 9,494 1,014 369 45,897 Total $ 8,391 $ 12,347 $ 12,601 $ 1,020 $ 371 $ 66,534 The Company’s allowance for loans that are individually evaluated for credit losses and collectively evaluated for credit losses as of June 30, 2020, are summarized in the following table by loan segment in accordance with the legacy “incurred loss” methodology disclosure requirements (in thousands): June 30, 2020 Commercial Agricultural Real Estate Consumer Total Loans individually evaluated for impairment $ 1,250 $ 83 $ 1,711 $ 2 $ 3,046 Loan collectively evaluated for impairment 17,322 2,461 40,912 5,206 65,901 Total $ 18,572 $ 2,544 $ 42,623 $ 5,208 $ 68,947 The Company’s recorded investment in loans as of June 30, 2021 and December 31, 2020, related to the balance in the allowance for credit losses on the basis of the Company’s adopted ASC 326 evaluation methodology follows below (in thousands): June 30, 2021 C&I Municipal Agricultural Construction Farm Loans individually evaluated for credit losses $ 24,425 $ 885 $ 6,250 $ 10,721 $ 4,536 Loans collectively evaluated for credit losses 958,678 178,471 88,962 540,207 180,752 Total $ 983,103 $ 179,356 $ 95,212 $ 550,928 $ 185,288 June 30, 2021 (continued) Non-Owner Owner Residential Auto Non-Auto Total Loans individually evaluated for credit losses $ 40,291 $ 51,808 $ 34,011 $ 1,671 $ 396 $ 174,994 Loans collectively evaluated for credit losses 633,317 768,247 1,294,463 382,093 104,418 5,129,608 Total $ 673,608 $ 820,055 $ 1,328,474 $ 383,764 $ 104,814 $ 5,304,602 December 31, 2020 C&I Municipal Agricultural Construction Farm Loans individually evaluated for credit losses $ 30,644 $ 9,439 $ 6,648 $ 15,205 $ 10,648 Loans collectively evaluated for credit losses 1,100,738 171,886 88,216 538,754 141,589 Total $ 1,131,382 $ 181,325 $ 94,864 $ 553,959 $ 152,237 December 31, 2020 (continued) Non-Owner Owner Residential Auto Non-Auto Total Loans individually evaluated for credit losses $ 22,626 $ 62,730 $ 37,047 $ 1,930 $ 534 $ 197,451 Loans collectively evaluated for credit losses 595,060 684,244 1,211,362 351,665 90,068 4,973,582 Total $ 617,686 $ 746,974 $ 1,248,409 $ 353,595 $ 90,602 $ 5,171,033 The Company’s recorded investment in loans as of June 30, 2020, related to the balance in the allowance for loan losses on the basis of the Company’s legacy “incurred loss” impairment methodology follows below (in thousands): June 30, 2020 Commercial Agricultural Real Estate Consumer Total Loans individually evaluated for impairment $ 4,618 $ 1,056 $ 33,170 $ 476 $ 39,320 Loan collectively evaluated for impairment 1,504,836 96,392 3,202,038 410,481 5,213,747 Total $ 1,509,454 $ 97,448 $ 3,235,208 $ 410,957 $ 5,253,067 From a credit risk standpoint, the Company rates its loans in one of five categories: (i) pass, (ii) special mention, (iii) substandard, (iv) doubtful or (v) loss (which are charged-off). The ratings of loans reflect a judgment about the risks of default and loss associated with the loan. The Company reviews the ratings on our credits as part of our on-going Credits rated special mention show clear signs of financial weaknesses or deterioration in credit worthiness, however, such concerns are not so pronounced that the Company generally expects to experience significant loss within the short-term. Such credits typically maintain the ability to perform within standard credit terms and credit exposure is not as prominent as credits rated more harshly. Credits rated substandard are those in which the normal repayment of principal and interest may be, or has been, jeopardized by reason of adverse trends or developments of a financial, managerial, economic or political nature, or important weaknesses exist in collateral. A protracted workout on these credits is a distinct possibility. Prompt corrective action is therefore required to strengthen the Company’s position, and/or to reduce exposure and to assure that adequate remedial measures are taken by the borrower. Credit exposure becomes more likely in such credits and a serious evaluation of the secondary support to the credit is performed. Credits rated doubtful are those in which full collection of principal appears highly questionable, and which some degree of loss is anticipated, even though the ultimate amount of loss may not yet be certain and/or other factors exist which could affect collection of debt. Based upon available information, positive action by the Company is required to avert or minimize loss. Credits rated doubtful are generally also placed on non-accrual. The following summarizes the Company’s internal ratings of its loans held-for-investment, June 30, 2021 2020 2019 2018 2017 Prior Revolving Total C&I Risk rating: Pass $ 485 $ 316 $ 71 $ 46 $ 22 $ 19 $ — $ 959 Special mention 4 2 1 1 1 — — 9 Substandard 4 6 2 3 — — — 15 Doubtful — — — — — — — — Total $ 493 $ 324 $ 74 $ 50 $ 23 $ 19 $ — $ 983 June 30, 2021 2020 2019 2018 2017 Prior Revolving Total Municipal Risk rating: Pass $ 23 $ 23 $ 8 $ 22 $ 18 $ 84 $ — $ 178 Special mention — — — — — — — — Substandard — — — — — 1 — 1 Doubtful — — — — — — — — Total $ 23 $ 23 $ 8 $ 22 $ 18 $ 85 $ — $ 179 June 30, 2021 2020 2019 2018 2017 Prior Revolving Total Agricultural Risk rating: Pass $ 30 $ 34 $ 15 $ 7 $ 3 $ 1 $ — $ 90 Special mention — — — — — — — — Substandard — 5 — — 1 — — 6 Doubtful — — — — — — — — Total $ 30 $ 39 $ 15 $ 7 $ 4 $ 1 $ — $ 96 June 30, 2021 2020 2019 2018 2017 Prior Revolving Total Construction & Development Risk rating: Pass $ 220 $ 237 $ 39 $ 18 $ 9 $ 17 $ — $ 540 Special mention 1 2 — — — — — 3 Substandard 2 2 4 — — — — 8 Doubtful — — — — — — — — Total $ 223 $ 241 $ 43 $ 18 $ 9 $ 17 $ — $ 551 June 30, 2021 2020 2019 2018 2017 Prior Revolving Total Farm Risk rating: Pass $ 59 $ 53 $ 17 $ 12 $ 9 $ 31 $ — $ 181 Special mention — — — — — — — — Substandard — 2 — 1 — 1 — 4 Doubtful — — — — — — — — Total $ 59 $ 55 $ 17 $ 13 $ 9 $ 32 $ — $ 185 June 30, 2021 2020 2019 2018 2017 Prior Revolving Total Non-Owner Risk rating: Pass $ 101 $ 171 $ 104 $ 80 $ 40 $ 138 $ — $ 634 Special mention — 1 13 1 7 3 — 25 Substandard 2 — 3 — 3 7 — 15 Doubtful — — — — — — — — Total $ 103 $ 172 $ 120 $ 81 $ 50 $ 148 $ — $ 674 June 30, 2021 2020 2019 2018 2017 Prior Revolving Total Owner Occupied CRE Risk rating: Pass $ 137 $ 178 $ 129 $ 103 $ 64 $ 157 $ — $ 768 Special mention 1 2 1 1 4 1 — 10 Substandard 8 3 5 14 2 10 — 42 Doubtful — — — — — — — — Total $ 146 $ 183 $ 135 $ 118 $ 70 $ 168 $ — $ 820 June 30, 2021 2020 2019 2018 2017 Prior Revolving Total Residential Risk rating: Pass $ 266 $ 316 $ 145 $ 105 $ 84 $ 282 $ 96 $ 1,294 Special mention — 3 1 1 1 3 — 9 Substandard 2 5 3 2 2 10 1 25 Doubtful — — — — — — — — Total $ 268 $ 324 $ 149 $ 108 $ 87 $ 295 $ 97 $ 1,328 June 30, 2021 2020 2019 2018 2017 Prior Revolving Total Auto Risk rating: Pass $ 118 $ 140 $ 76 $ 26 $ 13 $ 9 $ — $ 382 Special mention — — — — — — — — Substandard — 1 1 — — — — 2 Doubtful — — — — — — — — Total $ 118 $ 141 $ 77 $ 26 $ 13 $ 9 $ — $ 384 June 30, 2021 2020 2019 2018 2017 Prior Revolving Total Non-Auto Risk rating: Pass $ 40 $ 33 $ 14 $ 5 $ 2 $ 5 $ 6 $ 105 Special mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Total $ 40 $ 33 $ 14 $ 5 $ 2 $ 5 $ 6 $ 105 June 30, 2021 2020 2019 2018 2017 Prior Revolving Total Total Loans Risk rating: Pass $ 1,479 $ 1,501 $ 618 $ 424 $ 264 $ 743 $ 102 $ 5,131 Special mention 6 10 16 4 13 7 — 56 Substandard 18 24 18 20 8 29 1 118 Doubtful — — — — — — — — Total $ 1,503 $ 1,535 $ 652 $ 448 $ 285 $ 779 $ 103 $ 5,305 The following summarizes the Company’s internal ratings of its loans held-for-investment, December 31, 2020 2019 2018 2017 2016 Prior Revolving Total C&I Risk rating: Pass $ 874 $ 101 $ 70 $ 28 $ 10 $ 16 $ — $ 1,099 Special mention 9 2 — 1 — — — 12 Substandard 12 4 4 — — — — 20 Doubtful — — — — — — — — Total $ 895 $ 107 $ 74 $ 29 $ 10 $ 16 $ — $ 1,131 December 31, 2020 2019 2018 2017 2016 Prior Revolving Total Municipal Risk rating: Pass $ 26 $ 19 $ 29 $ 14 $ 13 $ 71 $ — $ 172 Special mention — — — — — — — — Substandard 2 — — 5 1 1 — 9 Doubtful — — — — — — — — Total $ 28 $ 19 $ 29 $ 19 $ 14 $ 72 $ — $ 181 December 31, 2020 2019 2018 2017 2016 Prior Revolving Total Agricultural Risk rating: Pass $ 57 $ 19 $ 9 $ 3 $ 1 $ — $ — $ 89 Special mention — — — — — — — — Substandard 6 — — — — — — 6 Doubtful — — — — — — — — Total $ 63 $ 19 $ 9 $ 3 $ 1 $ — $ — $ 95 December 31, 2020 2019 2018 2017 2016 Prior Revolving Total Construction & Development Risk rating: Pass $ 371 $ 97 $ 36 $ 19 $ 7 $ 9 $ — $ 539 Special mention 2 4 — — — — — 6 Substandard 4 1 — 3 — 1 — 9 Doubtful — — — — — — — — Total $ 377 $ 102 $ 36 $ 22 $ 7 $ 10 $ — $ 554 December 31, 2020 2019 2018 2017 2016 Prior Revolving Total Farm Risk rating: Pass $ 57 $ 22 $ 18 $ 11 $ 11 $ 23 $ — $ 142 Special mention — — — — — — — — Substandard 7 1 — 1 — 1 — 10 Doubtful — — — — — — — — Total $ 64 $ 23 $ 18 $ 12 $ 11 $ 24 $ — $ 152 December 31, 2020 2019 2018 2017 2016 Prior Revolving Total Non-Owner Risk rating: Pass $ 197 $ 117 $ 93 $ 44 $ 55 $ 88 $ — $ 594 Special mention 1 — 1 8 1 — — 11 Substandard — 2 — — — 11 — 13 Doubtful — — — — — — — — Total $ 198 $ 119 $ 94 $ 52 $ 56 $ 99 $ — $ 618 December 31, 2020 2019 2018 2017 2016 Prior Revolving Total Owner Occupied CRE Risk rating: Pass $ 176 $ 132 $ 105 $ 75 $ 65 $ 132 $ — $ 685 Special mention 5 5 2 4 1 1 — 18 Substandard 5 4 20 4 1 10 — 44 Doubtful — — — — — — — — Total $ 186 $ 141 $ 127 $ 83 $ 67 $ 143 $ — $ 747 December 31, 2020 2019 2018 2017 2016 Prior Revolving Total Residential Risk rating: Pass $ 373 $ 172 $ 134 $ 101 $ 101 $ 237 $ 93 $ 1,211 Special mention 3 1 1 1 1 3 — 10 Substandard 5 3 3 3 1 10 2 27 Doubtful — — — — — — — — Total $ 381 $ 176 $ 138 $ 105 $ 103 $ 250 $ 95 $ 1,248 December 31, 2020 2019 2018 2017 2016 Prior Revolving Total Auto Risk rating: Pass $ 177 $ 104 $ 39 $ 21 $ 9 $ 2 $ — $ 352 Special mention — — — — — — — — Substandard 1 1 — — — — — 2 Doubtful — — — — — — — — Total $ 178 $ 105 $ 39 $ 21 $ 9 $ 2 $ — $ 354 December 31, 2020 2019 2018 2017 2016 Prior Revolving Total Non-Auto Risk rating: Pass $ 48 $ 21 $ 7 $ 4 $ 1 $ 2 $ 7 $ 90 Special mention — — — — — — — — Substandard — — — — — 1 — 1 Doubtful — — — — — — — — Total $ 48 $ 21 $ 7 $ 4 $ 1 $ 3 $ 7 $ 91 December 31, 2020 2019 2018 2017 2016 Prior Revolving Total Total Loans Risk rating: Pass $ 2,356 $ 804 $ 540 $ 320 $ 273 $ 580 $ 100 $ 4,973 Special mention 20 12 4 14 3 4 — 57 Substandard 42 16 27 16 3 35 2 141 Doubtful — — — — — — — — Total $ 2,418 $ 832 $ 571 $ 350 $ 279 $ 619 $ 102 $ 5,171 The following tables summarize the Company’s internal ratings of its loans held-for-investment, June 30, 2020 Pass Special Substandard Doubtful Total Commercial $ 1,465 $ 9 $ 35 $ — $ 1,509 Agricultural 91 5 2 — 98 Real Estate 3,087 50 98 — 3,235 Consumer 409 — 2 — 411 Total $ 5,052 $ 64 $ 137 $ — $ 5,253 The Company’s past due loans are as follows (in thousands): June 30, 2021 15-59 60-89 Greater Total Past Current Total Loans 90 Days Commercial: C&I $ 3,432 $ 707 $ 230 $ 4,369 $ 978,734 $ 983,103 $ — Municipal 1,656 — — 1,656 177,700 179,356 — Total Commercial 5,088 707 230 6,025 1,156,434 1,162,459 — Agricultural 193 10 35 238 94,974 95,212 — Real Estate: Construction & Development 1,973 — 162 2,135 548,793 550,928 — Farm 1,138 — — 1,138 184,150 185,288 — Non-Owner 896 161 — 1,057 672,551 673,608 — Owner Occupied CRE 97 821 — 918 819,137 820,055 — Residential 5,946 373 100 6,419 1,322,055 1,328,474 — Total Real Estate 10,050 1,355 262 11,667 3,546,686 3,558,353 — Consumer: Auto 330 55 25 410 383,354 383,764 — Non-Auto 44 11 — 55 104,759 104,814 — Total Consumer 374 66 25 465 488,113 488,578 — Total $ 15,705 $ 2,138 $ 552 $ 18,395 $ 5,286,207 $ 5,304,602 $ — December 31, 2020 15-59 60-89 Greater Total Past Current Total Loans 90 Days Commercial: C&I $ 3,647 $ 406 $ 576 $ 4,629 $ 1,126,753 $ 1,131,382 $ 21 Municipal — — — — 181,325 181,325 — Total Commercial 3,647 406 576 4,629 1,308,078 1,312,707 21 Agricultural 193 95 — 288 94,576 94,864 — Real Estate: Construction & Development 4,775 44 — 4,819 549,140 553,959 — Farm 708 — — 708 151,529 152,237 — Non-Owner 613 — — 613 617,073 617,686 — Owner Occupied CRE 1,393 322 133 1,848 745,126 746,974 — Residential 8,072 18 275 8,365 1,240,044 1,248,409 33 Total Real Estate 15,561 384 408 16,353 3,302,912 3,319,265 33 Consumer: Auto 551 158 75 784 352,811 353,595 59 Non-Auto 214 24 — 238 90,364 90,602 — Total Consumer 765 182 75 1,022 443,175 444,197 59 Total $ 20,166 $ 1,067 $ 1,059 $ 22,292 $ 5,148,741 $ 5,171,033 $ 113 June 30, 2020 15-59 60-89 Greater Total Current Total Loans 90 Days Commercial $ 4,563 $ 474 $ 129 $ 5,166 $ 1,504,288 $ 1,509,454 $ — Agricultural 1,080 15 — 1,095 96,353 97,448 — Real Estate 13,678 110 726 14,514 3,220,694 3,235,208 — Consumer 410 83 105 598 410,359 410,957 92 Total $ 19,731 $ 682 $ 960 $ 21,373 $ 5,231,694 $ 5,253,067 $ 92 * The Company monitors commercial, agricultural and real estate loans after such loans are 15 days past due. Consumer loans are monitored after such loans are 30 days past due. The restructuring of a loan is considered a “troubled debt restructuring” if both the borrower is experiencing financial difficulties and the creditor has granted a concession. Concessions may include interest rate reductions or below market interest rates, principal forgiveness, restructuring amortization schedules, reductions in collateral and other actions intended to minimize potential losses. The Company’s loans that were modified and considered troubled debt restructurings are as follows (in thousands): Three-Months Ended June 30, 2021 Six-Months Pre- Modification Post- Modification Pre- Modification Post- Modification Recorded Recorded Recorded Recorded Number Investment Investment Number Investment Investment Commercial: C&I 2 $ 212 $ 212 4 $ 361 $ 361 Municipal — — — — — — Total Commercial 2 212 212 4 361 361 Agricultural 1 68 68 1 68 68 Real Estate: Construction & Development 1 200 200 1 200 200 Farm — — — — — — Non-Owner — — — — — — Owner Occupied CRE 2 548 548 3 1,047 1,047 Residential 1 245 245 3 443 443 Total Real Estate 4 993 993 7 1,690 1,690 Consumer: Auto 1 31 31 1 31 31 Non-Auto — — — — — — Total Consumer 1 31 31 1 31 31 Total 8 $ 1,304 $ 1,304 13 $ 2,150 $ 2,150 Three-Months Ended June 30, 2020 Six-Months Pre- Modification Post- Pre- Modification Post- Recorded Recorded Recorded Recorded Number Investment Investment Number Investment Investment Commercial 4 $ 196 $ 196 9 $ 484 $ 484 Agricultural — — — 1 134 134 Real Estate 1 123 123 1 123 123 Consumer — — — 1 14 14 Total 5 $ 319 $ 319 12 $ 755 $ 755 The balances below provide information as to how the loans were modified as troubled debt restructured loans (in thousands): Three-Months Ended June 30, 2021 Six-Months Adjusted Combined Adjusted Combined Interest Maturity Rate and Interest Maturity Rate and Rate Extended Maturity Rate Extended Maturity Commercial: C&I $ — $ 212 $ — $ — $ 212 $ 149 Municipal — — — — — — Total Commercial — 212 — — 212 149 Agricultural — 68 — — 68 — Real Estate: Construction & Development — 200 — — 200 — Farm — — — — — — Non-Owner — — — — — — Owner Occupied CRE — — 548 — — 1,047 Residential — 245 — — 245 198 Total Real Estate — 445 548 — 445 1,245 Consumer: Auto — — 31 — — 31 Non-Auto — — — — — — Total Consumer — — 31 — — 31 Total $ — $ 725 $ 579 $ — $ 725 $ 1,425 Three-Months Ended June 30, 2020 Six-Months Adjusted Combined Adjusted Combined Interest Maturity Rate and Interest Maturity Rate and Rate Extended Maturity Rate Extended Maturity Commercial $ — $ — $ 196 $ — $ 260 $ 224 Agricultural — — — — 134 — Real Estate — — 123 — — 123 Consumer — — — — 14 — Total $ — $ — $ 319 $ — $ 408 $ 347 During the three and six-months As of June 30, 2021, the Company has no commitments to lend additional funds to loan customers whose terms have been modified in troubled debt restructurings. |